Lets take a quick look at GBG's claim that they should be cash...

Lets take a quick look at GBG's claim that they should be cash flow positive for the Mar'14 quarter. Lets assume that KML achieves the highest magnetite forecast of 2.7MT for the 1H'14. 75% production during the 2Q'14 is 1.5MT leaving 1.2MT for the 1Q'14 which is about 0.45MT better than the rate for the 2H'13 that was producing negative cash flow of over $US200M per quarter. 0.45MT*$US136*(65/62)=$US64M improvement in revenue which is not enough to offset current negative cash flow to achieve positive cash flow! This calculation also does not factor in reduced reveuue from lower DSO shipments! Even at their lowest, GBG continue to make announcements that don't make sense. Also, don't forget that there will be production impacts when they get around to implementing the final fix in 12-18 months on top of the costs to implement it furter diluting GBG's position.

I love the way they through in that Phase 2 will be cheap without providing any guidance even though thay have done a feasibility study.